Tribunals Ontario / Tribunaux décisionnels Ontario
Assessment Review Board / Commission de révision de l’évaluation foncière
ISSUE DATE: May 25, 2021
FILE NO.: WR 169892
Assessed Person(s): 2146552 Ontario Inc.
Appellant(s): 2146552 Ontario Inc. and Robert Susko
Respondent(s): Municipal Property Assessment Corporation Region 28
Respondent(s): City of North Bay
Property Location(s): See Schedule A
Municipality(ies): City of North Bay
Roll Number(s): See Schedule A
Appeal Number(s): See Schedule A
Taxation Year(s): 2019, 2020 and 2021
Hearing Event No.: 741767
Legislative Authority: Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Representative |
|---|---|
| 2146552 Ontario Inc. | Robert Susko |
| Municipal Property Assessment Corporation | Charmaine Siddle |
| City of North Bay | No one appeared |
HEARD: April 8, 2021 by telephone conference
ADJUDICATOR: Anthony LaRegina, Member
DECISION
OVERVIEW
1Robert Susko (the “Appellant”), representing 2146552 Ontario Inc., filed property assessment appeals for the 2019 and 2020 taxation year with the Assessment Review Board (the “Board”) regarding the townhouse properties located at 714, 716, 718, 720, 722, 724, 726, 728 and 730 Wallace Road (“Subject Properties”) in the City of North Bay (“City”). Pursuant to s. 40(26) of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”), the Appellant is deemed to have brought the same appeals in respect of the 2021 taxation year.
2Pursuant to the provisions of the Act, the Municipal Property Assessment Corporation (“MPAC”) conducted a general reassessment of the Subject Properties and determined that their current value assessments were between $520,000 and $521,000. These townhomes are identical with the only difference being an enclosed porch on the properties with higher value assessments. It is the Appellant’s position that MPAC’s current value assessments are too high and that the assessed values should be reduced to $350,000 for each townhouse. At this hearing, MPAC has taken the position that the current value assessment should be reduced to $472,000 or $473,000 respectively.
3As part of the Request for Reconsideration (RfR) process, MPAC issued a Property Assessment Change Notice (PACN) effective October 30, 2019 for the properties located at 716, 718 and 720 Wallace Road which resulted in the section 33 appeals. The assessment values of these appeals are $374,195 for properties located at 716 and 718 Wallace Road and $375,007 for the property located at 720 Wallace Road. MPAC has taken the position that the assessment values of these appeals should be confirmed.
4Pursuant to s. 40(11) of the of the Act, the City is a party to this proceeding. No one appeared at the hearing on behalf of the City, and no evidence was submitted on its behalf.
5Section 44(3)(b) of the Assessment Act (“Act”) directs the Board to reduce the current value of the Subject Properties if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). Both MPAC and the Appellant take the position that equity is not at issue. Therefore, the Board accepts the position that equity is not at issue.
Issues for the Hearing
6The only issue left in this proceeding is the determination of the current value of the Subject Properties.
Result
7The Board finds that the correct current value of the Subject Properties for the 2020 taxation year is $419,000. The Board orders a reduction in the assessed values of the Subject Properties from $521,000 and $520,000 to $419,000 for the 2020 taxation year in relation to the section 40 appeals. The Board also orders a reduction in the section 33 appeals from $374,195 and $375,007 to $321,000 for the 2019 taxation years. Refer to Attachment 1 for the breakdown of values by property.
Description of Subject Properties
8The Subject Properties are residential townhome condominiums located on Wallace Road in the City of North Bay. These condominiums are two storeys with a construction quality of 7. They were built in 2019 with 1,884 square feet of building area, three bedrooms, 2.5 baths, air conditioning and in-floor radiant coil heating. The Subject Properties are located on Circle Lake, a designated area with the “threatened species” of Blanding’s Turtle, whose habitat is protected from damage or destruction.
9The Subject Properties 714, 720, 722, 730 Wallace Road have a returned value of $521,000 for the 2020 taxation year because they have an enclosed porch representing a slightly increased value over the other townhomes. Meanwhile, properties 716, 718, 724, 726 and 728 Wallace Road have returned values of $520,000. There were also three properties which were not occupied on October 30, 2019 and therefore have section 33 appeals for the 2019 taxation year. These are properties 716 and 718 Wallace Road that have retuned values of $374,195 and 720 Wallace Road which has a returned value of $375,007. The section 33 values represent the cost of construction. The value of the lot for each townhouse was also returned at $97,805.
ANALYSIS AND FINDINGS
A determination of the current value of the Subject Properties
10The issue to be determined on these appeals is the correct current value of the Subject Properties for the 2019 and 2020 taxation year. Pursuant to s. 19(1) of the Act, the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, MPAC is required to assess these value as of the valuation date, January 1, 2016 (“current value”). As defined in the Act, “current value means in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.”
11To determine market value, MPAC has utilized the direct sales comparison approach and submitted into evidence the sales of comparable properties in the vicinity of the Subject Properties. The comparable properties are rarely sold on the valuation day of January 1, 2016, and therefore their sale values are time-adjusted to greater or reduced values depending on whether the date of the sale occurred before or after the valuation day. According to the time-adjusted evidence submitted by MPAC, there was a -2.2% decrease in market value over a 34-month period starting February 23, 2015 and ending December 21, 2017. MPAC created a time adjustment factor table and graph by month covering the same period and applied these values to time-adjust the comparable sales provided in evidence.
12As part of the direct sales comparison approach, MPAC began by analysing the market area and concluded that there were 74 Residential Condominium Row/Townhouses that were sold between January 2015 to December 31, 2017 in the City of North Bay and 3 in the Municipality of Callander. Of the 77 sales, only five were located on the waterfront, and the sale price of these five ranged from $220,000 to $490,000 with a median sale price value of $330,000.
MPAC’s Comparable Properties
13In order to support the returned value of the Subject Properties, MPAC presented the sales of the two most comparable properties in the vicinity of the Subject Properties. They are 3477 Trout Lake Road Unit 5, which MPAC claims is superior, and 555 Main Street South Unit 9, which is inferior to the Subject Properties.
14MPAC’s detailed description of the Subject Properties and the two most comparable property sales are listed in the following.
Table 1 - MPAC’s Comparable Property Sales
| Subject Properties | Property 1 | Property 2 | |
|---|---|---|---|
| Address | 714, 716, 718, 720, 722, 724, 726, 728, 730 Wallace Road | 3477 Trout Lake Road Unit 5 | 555 Main Street South Unit 9 |
| Property Code and Description | (370) Residential Condominium | (370) Residential Condominium | (370) Residential Condominium |
| Current Value Assessment | $520,000 / $521,000 | $532,000 | $376,000 |
| Sale Date | December 2015 | December 2015 | |
| Sale Value | $490,000 | $365,000 | |
| TAS sale value | $489,830 | $364,873 | |
| TAS Ratio | 1.0861 | 1.0305 | |
| Effective Year Built | 2019 | 2006 | 1988 |
| Total Building Area – Square Feet | 1,884 | 1,960 | 1,707 |
| Full Storeys | 2 | 2 | 2 |
| First Floor square feet (“S.F.”) | 860 | 992 | 960 |
| Second Floor S.F. | 1,024 | 968 | 747 |
| Basement S.F. | 0 | 992 | 633 |
| Basement Finish S.F. | 0 | 595 | 300 |
| Secondary Structures | Attached Garage | Attached Garage | Attached Garage |
| Structure Code and Description | (354) Condo Row/Townhouse with enclosed balcony | (354) Condo Row/Townhouse with more than one balcony | (354) Condo Row/Townhouse with one open balcony |
| Bedrooms | 3 | 3 | 3 |
| Bathrooms | 2.5 | 3.5 | 2.5 |
| Fireplace | 0 | 1 | 1 |
| Proximity Variables | Proximity to institutional | Proximity to Public Boat dock/ramp and Railway | |
| On-site variables | View of lake obstructed | Good view of lake | Good view of lake |
| Waterfront variables | Shoreline weedy/algae, shallow, east exposure | Shoreline rocky, deep, permanent Dock, south exposure | Shoreline sandy, permanent dock, beach, landscaping, retaining wall/cabin cages, east exposure |
| MPAC’s Opinion of Comparability to Subject Properties | Superior | Inferior |
15MPAC has taken the position that the best comparable property sale is 3477 Trout Lake Road Unit 5 because 1) it is only 1.6788 kilometres from the Subject Properties in the City on a better lake, and 2) it is only 76 square feet larger in building area as compared to the Subject Properties. The differences are that this property has a fireplace and a basement area of 992 square feet including 595 square feet of finished space with a walkout, as compared to the Subject Properties which have no basement and no fireplace. MPAC claims that when applying all the adjustments in value between this property and the Subject Properties, the Subject Properties would have likely sold for the time adjusted sale amount of $475,830.
16MPAC also analysed the sale of 555 Main Street South Unit 9, which they claim is inferior to the Subject Properties. This property is located 11.92 kilometres away in the Municipality of Callander on Lake Nipissing, which is a better lake with better views as compared to Circle Lake where the Subject Properties are located. This property is 30 years older and 177 square feet smaller in building area than the Subject Properties, but it has a basement with 633 square feet as opposed to the Subject Properties which have no basement. MPAC claims that the Subject Properties are more superior to this property and when adjusting for the differences, MPAC submits that the Subject Properties would have likely sold for $473,033.
17MPAC submits that the current value of the Subject Properties should be the median of the likely sale value of the Subject Properties when compared to Sales 1 and 2. Such calculation would result in $474,000 for the properties with the enclosed balcony and $473,000 for the ones without the enclosed balcony.
18In further support of the above valuation using the direct sales comparison approach, MPAC reduced the returned value of $520,000 and 521,000 by $8,000 to remove the waterfront/lake variable accommodating the lack of potential development of the waterfront because of the protected Blanding’s Turtle population habitat. MPAC made a further 8% downward adjustment for the differences between 3477 Trout Lake Road Unit 5 and the Subject Properties based on the Assessment to Sale Ratio of 3477 Trout Lake Road Unit 5. The downward adjustments resulted in assessed values from $520,000 to $472,000 and $521,000 to $473,000.
19MPAC requests that the Board find the current values to be $473,000 for units 714, 720, 722 and 730 Wallace Road, which represents the units with the enclosed balcony and $472,000 for units 716, 718, 724, 726 and 728 Wallace Road without the enclosed balcony.
The Appellant’s Position
20The Appellant submits that while the Subject Properties are considered waterfront backing on Circle Lake, the site has Category 2 and 3 Blanding’s Turtle Habitat conditions and therefore no possibility of developing the shoreline and disturbing the Blanding’s Turtle in any way. Beaches or docks will never be possible as these restrictions are registered on Title.
21The Appellant submits that they built these properties with the intention of selling and therefore listed them for over a year with no offers being received. The Appellant further submits that they then converted the project into rental townhouse units until such time as the real estate market improves.
22The Appellant also entered evidence showing the sale of eight comparable condominium properties located on the water or across the street from the water in the City. These properties were sold between 2011 and 2020 with a range of sale values between $134,000 and $490,000 resulting in an average sale value of $235,250. The Appellant provided no detail of property characteristics other than the address, current value assessment, sale price and sale date. Based on the lack of details, the Board has no way of meaningfully comparing the Subject Properties to the comparable sales proposed by the Appellant and therefore will attribute no weight to these eight sales in establishing the current value of the Subject Properties.
23In the documentary evidence, which admittedly was not authored by the Appellant, the Appellant also provided an income approach to value. The Appellant could not explain the rationalization, quantitative analysis or conclusion and could not answer any of MPAC’s questions in relation to the income approach. The Board will therefore attribute no weight to the income approach to value submitted in the appellant’s documentary evidence.
24The Appellant submits that they constructed the exact same units as single-family and semis on 35 by 120 foot lots with full basements on Norman Avenue located in a residential subdivision in the City. The following assessment and sales information was obtained by the Appellant on MPAC’s About My Property site.
| Address | Built | Current Value Assessment | Sale Price | Sale Date |
|---|---|---|---|---|
| 493 Norman Avenue | 2014 | $263,000 | n/a | n/a |
| 487 Norman Avenue | 2012 | $278,000 | $242,000 | December 2018 |
| 481 Norman Avenue | 2011 | $325,000 | $323,900 | August 2017 |
| 473 Norman Avenue | 2012 | $286,000 | $295,000 | September 2018 |
| 465 Norman Avenue | 2011 | $325,000 | $292,750 | July 2017 |
25The Appellant submits that the best evidence of the current value of the Subject Properties is the sale of the identical semi-detached and single-family homes which were constructed on Norman Avenue. The Appellant submits that these comparable sales, while not townhouse condominiums, have the identical layouts and building areas as well as full basements, as compared to the Subject Properties which do not have basements. The Appellant further submits, if anything, the waterfront condominiums have less value as they have monthly maintenance fees while the homes on Norman Avenue have no monthly fees. The Appellant requests that the Board find the current value of the Subject Properties to be $350,000, which is slightly higher than the sale values of the properties on Norman Avenue. The Appellant also points out that the end units do not have covered porches as represented by MPAC and therefore requests a current value of $350,000 for all nine townhome condominiums.
Findings on the determination of the current value of the Subject Properties
26In support of establishing the correct current value for the Subject Properties, the Board has analysed all the evidence and agrees with MPAC that the current value of the Subject Properties lies within the adjusted sale range of the two comparable properties which MPAC submitted into evidence, 3477 Trout Lake Road Unit 5 at $489,830 and 555 Main Street South Unit 9 at $364,873.
27MPAC made downward adjustments to the returned current value assessments of the Subject Properties by $8,000 to compensate for the Blanding’s Turtle issue impacting the restrictions on the waterfront development and a further downward adjustment of 8% for the differences between the best comparable 3477 Trout Lake Road Unit 5 and the Subject Properties.
28The Board notes that the resulting current value assessment of $473,000/$472,000 for the Subject Properties is only $18,000 less than the sale value of 3477 Trout Lake Road Unit 5. It is clear from the evidence that the Subject Properties, while newly built, are substantially inferior to 3477 Trout Lake Road Unit 5. The Subject Properties are located on a lot with environmental restrictions relating to the Blanding’s Turtle Habitat which prohibits any alterations to the waterfront. Also, they have no basement and are located across the street from an industrial complex. MPAC’s best comparable, 3477 Trout Lake Road Unit 5 is directly located on the waterfront with unobstructed south views, rocky deep shoreline with a permanent dock, a slightly sloping topography, a larger building area and a 992 square feet walkout basement, as compared to the Subject Properties which have no dock, no walkout basement, an obstructed eastern view of the lake and no direct access to the weedy algae shoreline. The Board concludes that the Subject Properties should have a much greater downward adjustment than $18,000 to accommodate all these differences.
29However, the Board agrees with MPAC that the best available evidence of current value of the Subject Properties are the two comparable property sales provided by MPAC that are both townhomes located on water. As explained above, the Subject Properties are substantially inferior to 3477 Trout Lake Road Unit 5 and should therefore sell for a substantially lower value than $489,830. The Board has also determined that the current value of the Subject Properties should be higher than $364,873, the time adjusted sale value of 555 Main Street South Unit 9, which has a smaller building area with lower quality of construction of 6.5 and is 30 years older than the Subject Properties. The Board has therefore chosen the mid-point of the two adjusted sale values with a further reduction for the Blanding’s Turtle habitat restriction as the most likely sale value of the Subject Properties and therefore the best evidence of current value of the Subject Properties. Based on these two sales, the Board finds that the current value of the Subject Properties to be $427,351 which represents the middle of the time adjusted sale range between $364,873 and $489,830, in addition to a further adjustment for the lot restrictions resulting from Blanding’s Turtle.
30Both 3477 Trout Lake Road Unit 5 and 555 Main Street South Unit 9 have direct waterfront access in comparison to the Subject Properties which have restricted access to the water due to the Blanding’s Turtle issue. MPAC provided $8,000 as the only quantitative evidence to adjust for the waterfront restrictions and therefore the Board will make the additional $8,000 downward adjustment from $427,351 to $419,351 rounded to $419,000 to the current value of the Subject Properties.
31As an alternative approach to value, MPAC also made adjustments to each of the comparable sales in order to make a direct comparison and determined the current value of the Subject Properties to be in the range of $474,000. MPAC did not specifically identify the adjustments or provide any quantitative evidence to support the adjustments. The Board will therefore attribute no weight on the adjusted sale analysis comparing the Subject Properties to 3477 Trout Lake Road Unit 5 or 555 Main Street South Unit 9.
32The Board has reviewed the sales evidence provided by the Appellant of the properties built on Norman Avenue. These homes, while identical in first and second floor layout are all single-family and semi-detached homes as compared to the Subject Properties which are all lake-front condominium townhomes. The Board prefers to compare similar properties in determining the current value of the Subject Properties and therefore will attribute no weight to the single-family home sales on Norman Avenue.
33Based on the best available evidence, the Board finds the correct current value of the Subject Properties to be $419,000 based on a January 1, 2016 valuation day. The Board will make no adjustment for enclosed balconies on the end units as there is no evidence to support that enclosed balconies exist.
CONCLUSION
34The Board finds that the correct current value of the Subject Properties to be $419,000 for the 2020 taxation year in relation to the section 40 appeals. The Board also finds the correct current value of the section 33 appeals to be $321,000 based on a land value of $97,805.
35Pursuant to s. 44(3)(b) of the Act, the Board finds that equity is not at issue. Therefore, no equity reduction is required.
ORDER
36The Board orders that the assessment of the Subject Properties be reduced from $521,000 and 520,000 to $419,000 for the 2020 taxation year in relation to the section 40 appeals. The Board also orders the assessment value of the section 33 appeals for the 2019 taxation years be reduced from $374,195 and $375,007 to $321,000.
“Anthony LaRegina”
ANTHONY LaREGINA MEMBER Assessment Review Board
Website: www.tribunalsontario.ca/arb Telephone: 416-212-6349 Toll Free: 1-866-448-2248
Attachment 1
| Address | Section | 2019 From | 2019 To | 2020 From | 2020 To | 2021 From | 2021 To |
|---|---|---|---|---|---|---|---|
| 714 Wallace Road | 40 | 521,000 | 419,000 | 473,000 | 419,000 | ||
| 716 Wallace Road | 40 | 520,000 | 419,000 | 472,000 | 419,000 | ||
| 33 | 374,195 | 321,000 | |||||
| 718 Wallace Road | 40 | 520,000 | 419,000 | 472,000 | 419,000 | ||
| 33 | 374,195 | 321,000 | |||||
| 720 Wallace Road | 40 | 521,000 | 419,000 | 473,000 | 419,000 | ||
| 33 | 375,007 | 321,000 | |||||
| 722 Wallace Road | 40 | 521,000 | 419,000 | 473,000 | 419,000 | ||
| 724 Wallace Road | 40 | 520,000 | 419,000 | 472,000 | 419,000 | ||
| 726 Wallace Road | 40 | 520,000 | 419,000 | 472,000 | 419,000 | ||
| 728 Wallace Road | 40 | 520,000 | 419,000 | 472,000 | 419,000 | ||
| 730 Wallace Road | 40 | 521,000 | 419,000 | 473,000 | 419,000 |
Schedule A
Schedule A Continued